ALOHA, Ore. — With the state’s public employee retirement system at the forefront, the three main candidates for Oregon treasurer fielded questions from the members of the Washington County Public Affairs Forum Monday.
The treasurer does not have control over the state’s budget, and most suggested reforms to the Public Employee Retirement System (PERS) would require the approval of the legislature. The treasurer does control the state’s investments.
The first audience question went to Democratic candidate Tobias Read, a state representative from Beaverton, about whether he bore any responsibility for the $22 billion unfunded liability that PERS faces.
“I’m proud of the work we’ve done,” Read said, adding that he voted in favor of PERS reform in 2013.
Many of those reforms passed by the legislature were deemed unconstitutional by the Oregon Supreme Court in 2015, and the legislature is now back at the drawing board to find a solution that doesn’t interfere with retirement benefits already promised to state employees.
Read said that the treasury could focus on increasing returns on investments that are managed by the office, and that “among the most important” ways to do so was to reduce expenses by making more investment decisions in-house.
Republican Jeff Gudman, a Lake Oswego city councilor and an investor by trade, has supported a number of proposed constitutional reforms that require action by the legislature. He also supports the Investment Modernization Act, the thrice-proposed and thrice-failed initiative to facilitate insourcing of the state’s investments.
Chris Telfer, an Independent from Bend and current Lottery commissioner, recently released her “9-point plan” for PERS.
The first two “points” are acknowledging that PERS is a problem and advocating for any recommendations proposed by the Bipartisan Work Group led by Oregon Sens. Betsy Johnson, D-Scappoose, and Tim Knopp, R-Bend.
Although she did not discuss her detailed plans for PERS at Monday’s forum, the candidate laid out a number of suggestions in a plan released to the EO Media Group / Pamplin Media Group, including redirecting underperforming PERS investments to affordable housing projects and calling for increased “clarity” in the models used to calculate the defined-benefit plan.
Telfer said she opposes Measure 97, a proposed tax on “C” corporations with gross Oregon sales in excess of $25 million. She also criticized the state’s “ballooning” budget.
Read said he supports Measure 97 but is “not happy about it,” because it represented a failure in the legislature to pass tax reform.
Gudman, who also said the measure represents a legislative failure, called the proposal a “highly regressive” tax.
Karen Bolin, the president of the Aloha Business Association, asked about the state’s new payroll-deduction savings plan for people who don’t have retirement savings plans through their employers.
The plan will go into effect July 1, 2017, and Bolin voiced skepticism about the ability of the state to manage the plan in light of the large unfunded liability of PERS.
The plan deducts from an employee’s monthly paycheck and goes into a savings account.
Read said the state’s role in the plan is merely to administer the contract, and individuals can opt out. Read argued that more people saving for retirement would benefit the state’s budget in the long run.
The debate concluded with an audience member wondering about the size of the state debt.
None of the candidates could give an exact number, though Gudman said he believed it was in the neighborhood of $17 billion.
According to the most recent annual report by the state’s debt policy advisory commission, the state’s outstanding long-term general obligation, appropriation and revenue bond debt was about $10.5 billion, as of June 30, 2015.